The Dow Jones Industrial Average marked anotherrecord high close on Tuesday, rising for an eighth straight day,while European shares retreated from modest gains at the end ofthe session, just shy of a fresh 4-1/2-year closing high.

The MSCI's broadest index of Asia-Pacific shares outsideJapan was nearly flat, weighed down by a 0.3percent drop in Australian shares. Australian shares hita fresh 4-1/2-year high on Tuesday.

Seoul shares opened up 0.1 percent, after hitting athree-week low on Tuesday, as sentiment was dampened by worriesabout tensions with North Korea and the weaker Japanese yen.

Japan's Nikkei stock average opened down 0.5percent, after snapping an 8-day winning streak which took theindex up to a 4-1/2-year high on Tuesday.

"Investors' risk appetite hasn't changed on expectations ofaggressive policy easing from the BOJ and hopes for furtherweakness in the yen. But a correction is not surprising whilethe yen's weakness has paused," said Toshihiko Matsuno, a seniorstrategist at SMBC Friend Securities.

The dollar fell 0.2 percent to 95.90 yen after rising to 96.71 yen on Tuesday, its highest since August 2009. The euro fell 0.1 percent to 124.90 yen, afterreaching a one-month high of 126.03 on Tuesday. Expectations formuch bolder monetary easing from the Bank of Japan when a newleadership takes over next week have kept yen under pressure.

In contrast, Australia's relatively high yields and theReserve Bank of Australia lack of haste to cut interest ratessoon appear to have drawn investors to the Australian dollar, which was up 0.1 percent to $1.0327.

Sterling weakened after data published on Tuesday showed asurprise fall in British industrial output in January, pushingthe pound down to $1.4832, its lowest since late June2010.

Against the Australian dollar, the pound skidded towards A$1.4370, lows not seen since 1985.

"Sterling's weakness on the foreign exchanges remains intact as an absence of fresh initiatives from the Bank ofEngland, and the lack of room to ease fiscal policy, leave muchonus on a weaker pound to help stimulate growth," ANZ said in anote.

The euro was steady around $1.3027, after beingweighed down by a warning on Tuesday from Bundesbank chief JensWeidmann, who is also a member of the Governing Council of theEuropean Central Bank, that the euro zone's crisis has notended.

Investors will watch bond sales from highly-indebted eurozone countries to gauge the degree of anxiety. Italy will offerthree-year and 15-year bonds at an auction later on Wednesday,while Spain plans to sell bonds due 2029, 2040 and 2041 at aspecial, off-calendar auction on Thursday.